NSW Consumer Law Wake-Up Call: Fix Your Returns Policy Now
NSW Fair Trading’s enhanced powers—public warnings and Consumer Guarantee Directions—have raised the stakes for retailers. Here’s a practical, step-by-step playbook to tighten your returns policy, scripts, and systems so issues are resolved in-house, not escalated to Fair Trading or NCAT.
1) The Wake-Up Call: New Powers, New Scrutiny
Public warnings can now name and shame, while Consumer Guarantee Directions (CGDs) can compel remedies. Translation for small retailers: your complaints handling and returns policy will be read like a contract with the public. If your signage or scripts limit Australian Consumer Law (ACL) guarantees, you’re inviting enforcement—and reputational damage that lingers online.
“No refunds” signs and blanket refusals are the new red flags.
NSW is signaling a culture shift: resolve complaints efficiently and fairly, or expect visibility and direction from the regulator.
2) The Risk in Plain Sight: ‘No Refunds’ and Sloppy Scripts
Between July 2020 and early 2023, NSW Fair Trading received 78 complaints about one business—proof that patterns trigger action. A handful of avoidable missteps tend to drive most escalations:
- Blanket “no refunds” messaging (on receipts, websites, counters).
- Refusing a remedy for a major failure or offering store credit only.
- Phone or in‑person sales outside permitted times for unsolicited sales (e.g., not before 9am or after 6pm on weekdays; after 8pm for phone calls; Saturdays before 9am or after 5pm), inviting complaints on process as well as outcome.
- Inconsistent staff responses—customers hear “computer says no,” then head straight to Fair Trading.
These aren’t just service slip-ups; they’re invitations for public warnings, CGDs, and lasting brand damage.
3) What the Law Actually Requires
Consumer Guarantees at a glance
- Acceptable quality and fitness for purpose: goods must be safe, durable, and do what they’re meant to do; services must be provided with due care and skill.
- Major failure: the customer chooses a refund or replacement (for goods) or cancellation/refund (for services). Don’t force repairs or store credit.
- Minor problem: you can choose to repair, replace, or refund within a reasonable time.
New enforcement texture
- Public warnings: Fair Trading can publicly caution consumers about a trader.
- Consumer Guarantee Directions: Fair Trading can direct you to provide a remedy—failing to comply can escalate quickly.
Related compliance touchpoints
The Fair Trading Act 1987 (NSW) and the Australian Consumer Law underpin these obligations. Recent changes are designed to help consumers and businesses resolve complaints efficiently—if your systems are ready.
4) Audit Your Returns Policy and Staff Scripts
Document your business or get out. A written, current, single source of truth lets every team member—onsite or remote—follow the same playbook.
One-hour audit checklist
- Find and fix policy conflicts: remove “no refunds” lines; add ACL-based language (major vs minor failures, realistic timeframes).
- Update staff scripts: align opening lines (“I’m here to help you choose the right remedy”) and proof requests with ACL.
- Review signage, website, receipts: ensure wording doesn’t limit guarantees; add a short ACL statement.
- Escalation map: define when to offer refund/replacement/repair; who authorises amounts; when to offer goodwill.
- Recordkeeping: centralise complaint notes, outcomes, and dates—your best defence if Fair Trading calls.
Pro tip
Make the knowledge base your team’s homepage. Remote workers won’t guess if the answer is one click away.
5) The Three-Step Process That Stops Escalations
Build a simple flow so every complaint is handled consistently—on the floor, on the phone, or via chat.
1. Acknowledge
“Thanks for raising this—I’ll get this sorted with you now.” Capture details (purchase date, issue, desired outcome). Set expectations (“I’ll assess this within 10 minutes”).
2. Assess
- Check proof of purchase (or reasonable alternatives).
- Test/inspect; apply major vs minor failure criteria.
- Confirm warranty overlap but prioritise ACL rights (warranty is not a cap).
3. Resolve with the appropriate remedy
- Major failure: offer refund or replacement (customer chooses).
- Minor issue: repair first if reasonable and timely; if not, replace or refund.
- Service issues: fix promptly; if major, refund unused portion or cancel.
Scripts that de‑escalate
- “Under the Australian Consumer Law, you can choose a refund or replacement for a major fault. Which do you prefer?”
- “This looks minor and we can repair it today. If the issue returns, we’ll replace or refund.”
6) Systemise It: Training, Remote Teams, and Compliance‑by‑Design
Great processes fail without great enablement.
- SOPs + micro‑training: 10‑minute modules with examples of major/minor failures; quick quizzes.
- Single source of truth: host policy, scripts, decision trees, and templates in one place; version control it.
- Remote-ready: use checklists and form fields so distributed staff follow the same steps and capture the same data.
- Quality loops: weekly review of 5 random cases; coach to script; update the knowledge base instantly.
- Compliance guardrails: POS prompts for remedies; automatic reminders of contact time rules for outbound calls.
System mantra
Document once, train often, measure always.
7) Results: Fewer Complaints, Faster Resolutions
When retailers implement the audit and three-step process, two things happen fast:
- Escalations drop: customers feel heard and see a fair path to resolution, so disputes don’t leave the store.
- Consistency rises: managers can review standardised records; if Fair Trading contacts you, you show exactly how you complied.
Most importantly, teams stop guessing. The policy, scripts, and evidence live together—so even new or casual staff act like seasoned pros.
8) Takeaway: Make Compliance Your Competitive Edge
Compliance isn’t red tape—it’s a growth lever. Shoppers remember fair treatment more than flawless products.
7‑day action plan
- Delete “no refunds” wording; add ACL language to receipts and signage.
- Publish a one-page returns policy and a two-page script pack.
- Train the three-step process; role‑play two scenarios.
- Set up a complaints log and weekly quality review.
- Enable POS prompts for remedies and evidence capture.
- Audit phone/door contact windows if you do outbound sales.
- Nominate a compliance owner and book a 30‑day policy check‑in.
Do this now, before a complaint becomes a case file—or worse, a public warning.
